2012 – The Good, the Bad and the Ugly

2012 – The Good, the Bad and the Ugly

By Bettina Weiss, SEMI

As the end of the year approaches, it’s a good
time to take stock, look back at the busy year we’ve had and appreciate the
positive developments amidst a persistent solar winter. Rather than dwelling on
well-known woes such as overcapacity, financing hurdles and a deeply depressed
PV equipment market, I would like focus on what our industry has collectively
achieved this year.

Take jobs, for example. The Solar Foundation just reported that an additional 13,000
solar jobs were added in the U.S. this year, an uptick of 13.2 percent,
bringing the total number of people working in solar in the U.S. to more than
119,000. 92 percent of U.S. voters support solar energy. And President Obama,
who has set favorable goals for renewable energy, was just re-elected for a
second term.

Worldwide installations are up by 25 percent,
expected to reach 16 GW by year-end. There is hope that this will ease the
stubborn overcapacity situation over the course of next year. The amount of PV
connected to China’s grid reached 2.71 GW in September. Pete Danko said in
his Earthtechling post that actual PV power
flowing to the grid grew at an even faster rate – 537 percent in the same
period to 2,480 gigawatt-hours.

In Germany, according to the German Association
of Energy and Water Industries, 6.1 percent of electricity demand in the first nine
months of the year was met by solar energy. And while international thin film
suppliers selling into India’s solar market fear an expansion of domestic
content requirements to close the loophole for thin film in the National Solar Mission, some Indian
manufacturers are adapting to the current “adapt-or-perish” market scenario by fully or partially leasing their
facilities to international module suppliers.

In September, China’s National Energy
Administration (NEA) announced the finalized 12th Five-Year Plan for solar
development that sets a target of 21GW installed solar capacity by 2015,
including 20GW PV installations and 1GW CSP installations. The plan also sets a
total budget of 250 billion yuan, or about $40 billion, and expects half
million people employed in the solar industry by 2015. Additionally, the plan
sets a target of 50GW installed capacity by 2020. It is uncertain how
much of this plan is achievable but the ambition and vision for solar energy
deployment in China is real.

Also in September, the Japan Ministry of
Economy, Trade and Industry (METI) announced the results of the first two
months of the FIT program—1.3 GW of renewable energy projects are registered to
the new FIT program since it began in July 2012. METI estimates 2.5 GW of
renewable energy capacity will be added in this fiscal year (April 2012 to
March 2013). According to METI, solar photovoltaic energy is expected to
account for 80% of the total additional renewable energy
capacity in FY2012.

This means there’s still a lot of good among the bad and the ugly.
We have seen the first few cautiously crafted reports about a global PV market
uptick in late 2013, but the industry needs to see a sliver of sunshine on the
horizon…

Part of the “ugly,” is the urgency of
modernizing our grid infrastructure and developing viable storage
solutions. No example is as poignant as what happened during Hurricane
Sandy in late October. While residential solar panels held up well, even
during hurricane force winds, once the power grid shut down, the solar panels
were of no use to homeowners. (This happens for safety reasons and is not an issue with the actual solar
system.) Storage is the other missing piece of the puzzle and the
industry is furiously working to tackle that obstacle.

The German news magazine Der Spiegel published
an article in August of this year about instability in the German power grid.
Adding a reality check to its aggressive renewable energy goals (35 percent of
total power consumption from renewables by 2020, 80 percent by 2050, phasing
out nuclear power by 2022), Germany’s power grid has experienced sudden
fluctuations, resulting in damage sometimes in the hundreds of thousands of
euros for German industrial companies (for automated lines running 24/7).

India now holds the record for the world’s
largest blackout, cutting power to 620 million people in July 2012. That’s
twice the population of the entire United States. Twenty out of 28 states were
affected. India’s federal power minister blamed the states, saying they
overdrew their quota from the grid. India’s industry leaders however, point to
more systemic infrastructural and procedural shortcomings of an antiquated grid
system. Many say that India has simply outgrown its own energy infrastructure.

I am encouraged about the concerted global effort for smarter
grids-from groups such as International Smart Grid Action Network
(ISGAN) and the Global Smart Grid Federation. SEMI encourages public-private partnerships
and industry collaboration in manufacturing and deployment of solar energy and
much like some of our member companies who have become more
vertically-integrated to meet the needs of the end market and conserve
resources, SEMI is also reaching downstream to collaborate with entities,
governments and consortia in order to learn from one another, develop standards
and best practices, and exchange ideas.